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Bitcoin miners fell Thursday, giving back earlier gains, as the price of the cryptocurrency retreated in volatile trading following the U.S. Securities and Exchange Commission’s approval of the first U.S. spot bitcoin exchange-traded funds.
The two biggest mining stocks, Marathon Digital and Riot Platforms, lost 12% and 15%, respectively. Iris Energy fell 6% and CleanSpark lost 7%.
Investors were taking profits after the price of bitcoin briefly spiked above $49,000 for the first time since December 2021. It has since pulled back to around $46,000.
Miners were some of the biggest gainers in the stock market in 2023. Marathon finished last year higher by almost 590%, while Riot rose more than 350%. CleanSpark and Iris Energy both posted gains of more than 400%.
Miner revenue has also fallen in recent weeks as bitcoin transaction fees eased, according to data from CryptoQuant. Fees were extremely high for most of December due to high transaction activity on the network but have since cooled, which affects the mining companies’ revenue, CryptoQuant’s Julio Moreno explained.
Some investors may also be positioning for the upcoming Bitcoin halving, when the mining reward for mining bitcoin, and mining companies’ revenue, will be cut in half, per the Bitcoin code.
The halving, expected in April, is a market clearing event for miners. Although it historically precedes big gains in bitcoin — which typically benefit mining stocks — the event could push unprofitable miners out of the market, allowing more sustainable miners to gain market share.
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